Speech by Mr Heng Swee Keat, Deputy Prime Minister and Minister for Finance at Singapore Convention Signing Ceremony and Conference Gala Dinner on 7 August 2019 at Shangri-La Hotel07 Aug 2019
Ladies and Gentlemen
A very good evening.
1. I am happy to join all of you at this evening’s Gala Dinner for the Singapore Convention Signing Ceremony and Conference.
2. It is a rare opportunity to have such a large gathering of Ministers and senior officials from around the world, representing 70 states. We also have with us this evening many distinguished judges, senior practitioners, members of international dispute resolution institutions, and business leaders.
3. We are honoured that you have come from all over the world, to Singapore, to witness the historic signing of the Singapore Convention on Mediation.
4. The signing of the Singapore Convention on Mediation is particularly meaningful to Singapore as we are commemorating our Bicentennial this year.
a. Two hundred years ago, Sir Stamford Raffles landed in Singapore and started a trading port here.
b. This marked the beginning of modern Singapore. The British established many of our key institutions. These include a legal system based on the English common law, which we adapted over the years to suit our changing context and needs.5. Singapore became an independent nation in 1965. As a small country with no natural resources, providing our people with an environment where they can develop and grow was critical. The rule of law was an important foundation upon which our nation was built.
a. This was put to the test in our early years of nationhood. Communal tensions were rife, leading to racial riots. Corruption was endemic. But our founding fathers persevered, and the law prevailed.
b. It has been fifty years since the last race riots in 1969. Our five decades of peace and relative prosperity is made possible by a strong rule of law. Whether he is an individual or the Government, no one is above the law.6. Upholding the rule of law is not only key to our domestic cohesion and stability, but this has also been critical to our economic progress.
a. Companies from around the world can confidently bring their people and investments to Singapore, because they know that their investments and intellectual property rights will be well protected. And they can operate in a transparent and corruption free environment.
b. Foreign investments flowed into Singapore, as we could provide them with the necessary legal certainty. In our early years of nationhood, our strict adherence to the law gave us a vital competitive advantage compared to other countries. This was a crucial ingredient in our rapid advancement from third world to first.7. Beyond our shores, Singapore has also been a strong advocate for a rules-based international order. Singapore played an active role at the United Nations (UN), including the negotiation of the UN Convention on the Law of the Sea. International law is one important aspect of international relations. And it is in the long-term interests of all states, big or small, to resort to law no matter how tempting the alternatives may seem.
8. This is clear in the domain of international commerce and business. In this domain, we are playing our part in upholding the rule of law, by providing a trusted and neutral venue for commercial dispute resolution. Over the years, Singapore has developed a strong dispute resolution eco-system. Our menu of dispute resolution options includes a mix of international commercial litigation, arbitration and mediation.
a. For litigation, we established the Singapore International Commercial Court (SICC), the first of its kind in Asia. The SICC marries the advantages of traditional court based litigation with innovative features catering specially to the needs of international parties with cross-border disputes.
b. More companies in the region are also using Singapore for arbitration. The Singapore International Arbitration Centre is ranked the third most preferred arbitration Institution globally, and the top in Asia. It has seen its international caseload quadruple in the last ten years.
c. Five years ago, we also set up the Singapore International Mediation Centre (SIMC) to offer international commercial mediation services.
i. Despite being a relatively young institution, SIMC has quickly gained traction, with its cumulative caseload rising from 6 in the first year to 68 by 2018.
ii. SIMC’s settlement rate is at 85%, which is significantly above the 70% global average.
9. The Singapore Convention on Mediation comes on the back of Singapore’s longstanding commitment to the international rule of law. And our efforts to better serve the needs of companies in the region, when they have differences with other companies in their business dealings.
10. There has been unprecedented growth in cross-border trade and investment, especially in the region.
a. With the rise in cross-border commercial transactions, more cross-border differences may arise. When they do, parties need fair and efficient ways to resolve disputes in a timely manner.
b. Traditionally, businesses rely on litigation and arbitration. These dispute resolution mechanisms appeal to businesses as there is certainty that judgements and arbitral awards can be enforced internationally.
c. But, in recent years, mediation has risen in prominence.
i. Mediation is cheaper and faster. It preserves harmony and business relationships, which is in line with many cultures, particularly in Asia.
ii. Mediation gives businesses an additional option for dealing with cross-border disputes.
a. There is big demand for infrastructure projects around the world. The Asian Development Bank estimates that from 2016 to 2030, infrastructure needs for developing Asia alone will reach $26 trillion US dollars.
b. Infrastructure projects are inherently complex. These are long-term commitments, which are expected to provide a stream of services for many years.
i. Such projects often involve multiple parties, over multiple jurisdictions, and with multiple contracts.
ii. They require considerable engineering expertise and advanced technologies to build. Maintenance of these assets can also be complex.
iii. The stakes are high, not just because of the large sums involved, but also because the projects often have far wider economic and socio-political impact.
c. Hence, beyond structuring these projects well at the onset, it is equally important to have good dispute resolution mechanisms that can resolve issues when they arise across the lifetime of the projects.
i. Litigation or arbitration proceedings, once initiated, are often protracted. In the meantime, the project stalls. The earlier and more swiftly problems can be resolved, the better.
ii. Mediation is therefore a good option for such disputes, because it focuses on solving the problem rather than on deciding who is right. It seeks to resolve the problem in a way that will preserve relationships and allow the project to go on.
d. For this reason, Singapore has been promoting the use of mediation for disputes relating to infrastructure projects.
i. Last year, Singapore launched a new Singapore Infrastructure Dispute-Management Protocol.
ii. Under the protocol, parties involved will appoint a third-party Dispute Board to follow the project from start to completion.
iii. The Dispute Board will assist parties in working through issues along the way, before they escalate into disputes.
a. This is why the Singapore Convention on Mediation is critical to the adoption of international commercial mediation as a dispute resolution option. The Convention will make it easier for businesses to enforce mediated settlement agreements with their
b. This is particularly so for high value, cross-border transactions – such as mega infrastructure projects.
a. This will add to instruments such as the New York Convention for arbitration, and The Hague Convention on Choice of Court Agreements for litigation.
b. The Singapore Convention will add more options for dispute resolution, provide greater certainty and assurance for businesses, and facilitate international trade and commerce.
14. The Singapore Convention on Mediation is an outcome of three years of hard work and perseverance.
a. It was not easy for delegations with different perspectives to come together to reach a consensus. Delegations had to build consensus by coming up with creative solutions.
b. I am glad that the United Nations Commission on International Trade Law (UNCITRAL) Working Group II persevered. The efforts of Working Group II paid off, and they eventually finalised the Convention.
c. I would like to take this opportunity to thank UNCITRAL, the UNCITRAL Secretariat, and the UNCITRAL Working Group II for all the hard work and contributions.
a. This bears testament to countries’ continued commitment to a rules-based international order.
b. This is particularly crucial now as the rules-based international order which has underpinned global peace and stability, is coming under pressure.
i. All states benefit from an international world order that is based on the rule of law. It allows for predictability and the management of relations and issues based on agreed principles. This in turn assures countries, big and small, that their interests will be taken into account.
c. A rules-based international order provides a strong foundation for the international community to come together to tackle the many global issues confronting us.
i. These include tackling global warming and climate change, improving food security and access to clean water, and reducing poverty and the risk of pandemics.
ii. In fact, we are far from achieving the UN Sustainable Development Goals that all nations signed up to in 2015. We can succeed in achieving these goals only if countries uphold the rule of law and take concrete steps together.
a. Protecting the legal rights of all parties equally will help create a stable, fair and transparent business environment.
b. Agreeing in advance on a common set of terms and rules allow parties to resolve disputes in a timely and fair manner when differences arise.
c. By increasing predictability, we help businesses lower costs.
18. In conclusion, the Singapore Convention on Mediation is an important piece in the international dispute resolution enforcement framework. The signing of the Convention is a clear signal of our commitment to a rules-based international order.
19. This Conference brings together leaders of the legal community from around the world – to better understand one another, bridge differences and find new ways to resolve disputes. Your perspectives have helped broaden our horizons. And we must continue to work together to further advance the resolution of disputes beyond this Conference.
20. I wish everyone an enjoyable evening. Thank you.